KMD Brands (KMD) H1 2026 earnings summary

Executive summary

• Group sales for the half year ended 31 January 2026 reached NZ$505.4 million, up 7.3% year-over-year, with all brands returning to growth and Kathmandu leading momentum in Australia and New Zealand.

• Underlying EBITDA increased to NZ$11.5 million from NZ$3.9 million last year, reflecting improved cost discipline and operational leverage.

• Statutory net loss after tax was NZ$13.1 million; underlying net loss improved to NZ$11.5 million.

• The Next Level transformation strategy is delivering early progress, with cost savings, inventory optimization, and digital upgrades underway.

• No interim dividend was declared for the period.

Financial highlights

• Revenue for the six months ended 31 January 2026 was NZ$505.4 million, up from NZ$470.9 million in the prior year period.

• Underlying EBITDA grew to NZ$11.5 million (2.3% margin), with statutory EBITDA at NZ$63.3 million.

• Group gross margin was 56.8%, down 120 bps year-over-year, reflecting a promotional marketplace and inventory optimization.

• Net loss after tax was NZ$13.1 million, compared to NZ$20.7 million in the prior year period.

• Operating expenses as a percentage of sales improved to 54.5% from 57.2% year-over-year.

Outlook and guidance

• Kathmandu expects further sales and gross margin expansion in the second half, with strong early trading (+11.1% same-store sales year-over-year for first six weeks of H2).

• Rip Curl and Oboz wholesale order books for H2 are in line with last year; gross margin expansion anticipated.

• Underlying operating expenses as a percentage of sales forecast to improve year-over-year; full-year OpEx to be broadly flat on a constant currency basis.

• EBITDA margin expansion expected in FY 2026; capital expenditure targeted at NZ$25 million.

• Targeting leverage ratio below 0.5x net debt to EBITDA by end of FY 2027.